Securities and Exchange Board of India plans to crack down on the corporates if they fail to comply with the Clause 49 of the Listing agreement on corporate governance norms by the end of this calendar year.
Delivering the keynote address in a seminar on 'Corporate Governance- shift from compliance to delivery values,' M Damodaran, chairman, Sebi, said that all companies are expected to comply with the Clause 49 by December 31, 2005.
Failure to do so will attract a daily penalty amount relative to the company size, he said. "Spending on compliance should be treated by companies as investment to earn goodwill, not an expenditure," said Damodaran.
N Sundararajan, secretary, Ashok Leyland Limited, recommended that Sebi may review the non-statutory requirements relating to whistleblowers policy and to specify differential degrees of regulation based on ownership.
He also recommended that Sebi may develop and maintain a panel of independent directors to be appointed by trade, industry, professional bodies and associations and be remunerated by the Investor Education and Promotion Fund.
Apart from this, Sundararajan appealed that corporate governance rating to be actively encouraged and through specialised independent agencies like ICRA, CRISIL and others.
Ravi Parthasarathy, chairman, Infrastructure Leasing and Financial Services, in his speech on 'Venture Capitalist's Perspective for Small and Medium Enterprises said that SMEs in the country are almost negligible in spite of generating greater employment and improving the economy of a country.
He added that proposals are there to set up two industrial clusters - one at Palladam in Coimbatore and another in Hyderabad which will have a common infrastructure, common security and common branding in order to promote intra-cluster support.
The speakers list included Anjan Ghosh, general manager and head of corporate governance rating, ICRA Limited, Kolkata, V S Vasudevan, chief financial officer of Dr Reddy's Laboratories Limited, Hyderabad and M S Sekhar, managing director, Three D Management Services, Chennai.
The seminar was organised by the Madras Chamber of Commerce and Industry in association with ICRA Limited and Three D Management Services.
